Technology companies have offered a mixed response to the economic slowdown, according to Deloitte &...
Technology companies have offered a mixed response to the economic slowdown, according to Deloitte & Touche's annual technology industry survey.
Given the weakness in demand for technology products and services, the majority of companies surveyed have dropped any plans for flotation and now see mergers and acquisitions as a more probable avenue for corporate activity.
William Touche, lead partner at Deloitte & Touche, said M&A activity was the most likely route for technology companies to gain funding, with 41% of companies expecting to be acquired, compared with 25% last year.
He said: 'IPOs have either been postponed or are currently off the agenda. Shrinking capitalisation means companies need to be larger to get fund manager attention. It will be much harder for small companies to pursue listings and the required critical mass will mean more M&A activity pre-listing.'
Despite the swathe of job cuts that have plagued the sector, the majority of smaller technology companies reported they expected to add to their sales teams and that staff turnover had actually fallen.
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